All Eyes on Europe This Summer

Almost everyone I talk to thinks the European sovereign debt crisis has passed. All is on the mend in Europe, they say.

But as far as I’m concerned, nothing could be further from the truth.

First, severe austerity measures continue to this day, and they are hollowing out Europe’s economic growth.

The proof is in the numbers. Before the Greek crisis flared up, debt-to-GDP in Greece stood at 113 percent. Today, even after all the write-offs, Greece’s debt-to-GDP is a whopping 157 percent.

In Spain, pre-crisis debt stood at 40 percent of GDP. Today it’s 84 percent.

In Italy, it was 106 percent. Now it’s 127 percent.

In France, it was 68 percent. Now it’s 90 percent.

Even Germany’s debt-to-GDP is worsening, leaping from almost 67 percent in 2008 to 82 percent today.

Second, Italy, Portugal, Spain, and Greece remain hotbeds for massive social unrest.

Third, European banks are a disaster in the making.

Fourth, Europe’s economy as a whole is sinking fast.

Fifth, deflation is high.

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